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Gadget CC manufactures and sells a multituei cooker. Low-income households can use it for the purpose of preparing food or heating water. There is a
Gadget CC manufactures and sells a multituei cooker. Low-income households can use it for the purpose of preparing food or heating water. There is a large number of different retailers and cooperatives that sell a similar product. Therefore: the owner Jabu Jacobs cannot consider increasing the price of the product for fear of tosing his customers to competitors. The bookkeeper has extracted the following information from the production records: *Note: Total xed cost: - R150. Jabu has approached you in your capacity as a management consultant for assistance in interpreting this information. He has told you he is not sure whether he should continue with the business or rather ctose it down. Required: 3.1 As a management consultant, you know the information in the table is still incomplete. Complete the table by adding the ooiumns for marginal cost1 marginal prot and total prot {loss} that are relevant to the decision to continue or close down. {12} 3.2 Use the updated tnfonnation from Question 3.1 to advise Jabu whether he should continue with the business or shutdown. 1l'rour answer should indude all the facts that are relevant to the decision. (21]
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